Mr. Troy Griffiths reports

VIGIL REPORTS RECORD QUARTERLY REVENUE AND EARNINGS

Vigil Health Solutions Inc. has released the results of operations for the quarter ending June 30, 2016.

Business highlights:

• Earnings before income taxes up 705 per cent to $265,000 from $33,000 in the first quarter of fiscal 2016;
• Earnings before interest, taxes, depreciation and amortization of $274,000 compared with $49,000 in the three months ended June 30, 2015;
• Revenue up 29 per cent to $1.66-million compared with $1.28-million in the three-month period ended June 30, 2015;
• Sales bookings grew 11 per cent to $1.34-million from $1.21-million in the first quarter of fiscal 2016.

"The company posted record quarterly earnings and revenue reflecting our new project sales and our growing recurring revenue. Recurring revenue includes follow-on sales of monitoring and wireless communications equipment. It also contains annual software maintenance, which the majority of our customers sign up for thanks to our exceptional customer service team," stated Troy Griffiths, president and chief executive officer of Vigil Health Solutions.

Financial results

Revenue for the three months ended June 30, 2016, was $1.66-million compared with $1.28-million in the three-month period ended June 30, 2015, an increase of 29 per cent. This related to higher project values year over year, and growing follow-on product, service and maintenance revenues. Project revenue from new and existing customers made up 58 per cent of total revenue; the remaining revenue came from follow-on sales to existing customers. These sales include service and maintenance billings, and replacement products, including wireless devices and communication equipment.

Bookings for the quarter were $1.34-million, up 11 per cent compared with the prior fiscal year's bookings of $1.21-million. The number of project sales closed increased to 15 in the quarter from 14 in the period ending June 30, 2015.

At June 30, 2016, Vigil had a backlog of approximately $3.20-million (including $1.53-million in deposits and progress billings, recorded as deferred revenue on the balance sheet) compared with approximately $2.95-million (including $973,000 in deposits and progress billings, recorded as deferred revenue on the balance sheet) at June 30, 2015. At June 30, 2016, Vigil's backlog included 44 projects at varying stages of installation and progress billing with an average size of $80,000. There were 33 projects with an average size of $89,000 in the three months ended June 30, 2015.

The gross margin percentage for the three months ended June 30, 2016, was 52 per cent compared with 49 per cent for the three months ended June 30, 2015. Favourable foreign exchange rates on U.S.-dollar-denominated revenue reported in Canadian dollars increased margins beyond management's expectations of between 45 per cent and 50 per cent. One-off sales grew by 21 per cent or $111,000; as these sales generally don't include lower-margin labour components, this increase positively affects overall margin.

Operating expenditures for the three months ended June 30, 2016, were $610,000 compared with $599,000 for the period ended June 30, 2015.

Earnings before income taxes for the three-month period ended June 30, 2016, were $265,000 compared with $33,000 for the previous year. The increase in earnings reflects the improved revenue and margin. Net and comprehensive income was $196,000 or 1.6 cents per share compared with $33,000 or 0.2 cent per share.

Detailed financial statements along with management discussion and analysis have been filed with SEDAR.

Financial information will be mailed to entitled securityholders on Aug. 26, 2016, or, upon notice to the company, entitled securityholders may request a copy of financials in advance.

                    SUMMARY FINANCIAL INFORMATION                            
                                                   June 30,         June 30, 
                                                      2016             2015 
                                                                            
Revenue                                   $      1,657,295 $      1,283,178 
Cost of sales                                      788,711          650,528 
Gross profit                                       868,584          632,650 
Expenses                                           609,523          598,518 
Income before the following items                  259,061           34,132 
Other income (expense)                               6,186           (1,164)
Earnings before income taxes                       265,247           32,968 
Income taxes                                        68,964                - 
Comprehensive income for the period       $        196,283 $         32,968 

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